Sweden’s government crisis means less money for working life

On Wednesday 3 December Sweden’s Prime Minister Stefan Löfven announced snap elections will be held on 22 March 2015. His centre-left minority government’s budget was voted down in parliament, which also means the promised increase in spending for the Public Employment Service and the Work Environment Authority will not materialise.

“This means we cannot expand our inspections like we
probably could have done with more money. But we will continue to do
our job, since our mission remains unchanged,” Director General at
Swedish Work Environment Authority Erna Zelmin-Ekenhem told Swedish
Radio. 

As a result of the government’s budget defeat and
the voting through of the centre-right opposition budget proposal,
there will be less money for labour market and working life measures.
The Swedish Public Employment Service looses out on more than 500
million kronor (€53.8m) in administrative support. There will be no
money for various work creation measures either. The  Swedish
Work Environment Authority is loosing out on funding worth 100
million kronor (€10.7m). The Authority has seen cuts to its funding in
the past few years, which has led to fewer work environment
inspections. This fact got a lot of attention recently, after two
construction workers died while working on a project in Stockholm.
 

Pensioners hit

Other work place investments which will now not be
implemented include higher unemployment benefits and new investments in
working life research, as promised in the government programme. Retired
people on lower pensions will also not be seeing a promised tax relief,
and there will be no increase in sick pay.

Special investments in geriatric care and education,
including a planned increase in teachers’ wages, will also fall by the
wayside. However, tax relief for certain domestic work, the so-called
RUT relief, will remain in its current form. The government had
announced they would cut the tax relief for homework help, but this
will now remain, along with a 50 percent cut to the payroll tax for
young employees. 

The budget has been hanging like a dark cloud over
the centre-left government since it came to power after September
elections. It was immediately clear that the parliamentary make-up
would be problematic, as Stefan Löfven’s Social Democrats were tasked
with forming a government. None of the traditional political blocks
secured a parliamentary majority, and the Sweden Democrats (SD) held
the balance of power.  

For a long time they did not say how they would vote
on the budget, but during a live press conference the day before the
vote the SD leadership announced that the opposition’s budget proposal
would get their vote. The party spokesman Mattias Karlsson also made it
clear that they would vote down any future budget from any government
which did not want to cut immigration. 

“A serious situation”

That same evening Stefan Löfven asked the four
parties on the centre-right to join talks to try to solve the difficult
situation, but no agreement was reached. The following day, on 3
December, the Swedish parliament voted through the opposition’s budget.
Later that day, a clearly disappointed Stefan Löfven told a press
conference that he would announce snap elections.

“Sweden is in a serious situation. On 29
December the government will call new elections. And we do this to
allow voters to make a decision on the new political landscape which
has emerged,” said Prime Minister Stefan Löfven.